Spain's resounding 7-0 win over Costa Rica in their opening game proved to be a false dawn as they failed to win any of their subsequent three matches in Qatar.
They drew 1-1 with Germany, lost 2-1 to Japan before a goalless draw with Morocco in the last 16 culminated in a penalty shootout loss to the North Africans.
Enrique has been in charge of Spain since 2018 but stepped away in 2019 briefly to care for his sick young daughter who later died of cancer.
The former Barcelona boss led Spain to the semi-finals of EURO 2020.
"The RFEF would like to thank Luis Enrique and his entire coaching staff at the helm of the absolute national team in recent years," a statement from the Royal Spanish Football Federation read.
"The sports management of the RFEF has transferred to the president a report in which it is determined that a new project should start for the Spanish soccer team.
"The aim is to continue with the growth achieved in recent years thanks to the work carried out by Luis Enrique and their collaborators.
"Both the president, Luis Rubiales, and the sports director, Jose Francisco Molina, have transmitted the decision to the coach.
"The RFEF energetically wishes Luis Enrique and his team the best of luck in their future professional projects.
"The coach earns the love and admiration of his collaborators in the national team and of the entire Federation, which will always be his home."
Spain will be making their sixth managerial alteration since June 2018 after Enrique's departure.
